EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712170
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Surf Hardware International Pty Limited applied for a TCO in respect of certain surfboard fin wallets on 23 July 2007.
Instrument
TCO No 0712170 was made on 02 October 2007. It declares that those certain surfboard fin wallets are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0712170 is taken to have come into force on 23 July 2007.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Commonwealth Parliament, governs the regulation of customs and excise in Australia. Part XVA of the Act establishes a framework under which Tariff Concession Orders (TCOs) can be made to apply reduced rates of customs duty on specific goods. This legislative instrument addresses the need to facilitate trade by reducing import costs for certain goods, thereby encouraging their availability and use within Australia. The instrument in question, Tariff Concession Instrument No. 0712170, was made under this scheme on 2 October 2007, following an application by Surf Hardware International Pty Limited for tariff concessions on surfboard fin wallets. The policy objective is to ensure that the application of tariff concessions does not disadvantage existing stakeholders and that importers can benefit from the reduced duty rates on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0712170 pertains to the Customs Act 1901 and specifically applies to the process of Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on certain goods. The Act enables the Chief Executive Officer of Customs (CEO) to make TCOs upon application, provided the goods in question meet the core criteria outlined in the Act, such as the absence of substitutable goods being produced in Australia in the ordinary course of business. This Instrument was made in response to an application by Surf Hardware International Pty Limited for certain surfboard fin wallets, and it came into force on the date the application was lodged, 23 July 2007. The geographic reach of the Act is national, applying across all jurisdictions within Australia, as it pertains to the Customs Act which is a Commonwealth Act. The TCO does not affect the rights of any person adversely as at the date of its registration and does not impose any liabilities on any person. Importantly, it allows importers of the specified goods to apply for a refund of duty on imports since the effective date of the TCO. The scope of the Instrument is limited to the specific goods mentioned and the conditions set out in the Act, without any exclusions or exemptions explicitly stated beyond those goods specified in section 269SJ of the Act that cannot be subject to a TCO.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0712170 are sections 269C, 269P, and 269SJ of the Customs Act 1901. Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that a TCO application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269SJ lists the goods that cannot be subject to a TCO. This particular instrument, TCO No. 0712170, concerns surfboard fin wallets and declares that they are subject to item 50 of Schedule 4, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. Under section 269F, an applicant must submit an application to the CEO for a TCO in respect of goods. The CEO, in turn, has a duty under section 269P(3) to decide whether the application meets the core criteria and, if satisfied, to make a written order. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO must consider any submissions received and respond appropriately.
Failure to comply with the requirements of the Customs Act 1901 may result in various penalties and consequences. While the explanatory statement does not detail specific offences or penalties for non-compliance with the TCO process itself, breaches of the broader Customs Act 1901 can result in substantial penalties. For instance, under section 234 of the Act, a person who contravenes any provision of the Act or regulations may be liable for a civil penalty of up to $22,200 for a corporation and $4,440 for an individual, in addition to potential criminal penalties. These may include imprisonment, fines, or both, depending on the severity of the offence.
In summary, Tariff Concession Instrument No. 0712170 grants a tariff concession for certain surfboard fin wallets, effectively reducing the customs duty rate from 5% to free. The main requirements involve the CEO determining whether the application for a TCO meets the core criteria and, if so, issuing the order. There are also obligations to publish notices in the Gazette and consider any submissions received. While the explanatory statement does not detail specific penalties for the TCO process, breaches of the Customs Act 1901 can result in civil and criminal penalties, including fines and imprisonment.